Why the coronavirus outbreak is rattling markets
New York (CNN Business)Canada Goose, maker of high end parkas, warned Friday that its 2020 sales and earnings would be hurt by the coronavirus outbreak in China.
Shares of Canada Goose (GOOS) plunged nearly 5% on the news.
“The health crisis has resulted in a sharp decline in customer traffic and purchasing activity,” Canada Goose said in its earnings release.
“Retail stores and e-commerce across Greater China have and continue to experience significant reductions in revenue,” the company added.
Disruptions to global travel have also hurt retail sales in North America and Europe.
Canada Goose said that so far, its supply chain has not been interrupted. The company added that it believes the current weak sales in China will be temporary because of the “extraordinary circumstances” of the coronavirus outbreak, adding that sales in Asia in its most recent quarter had doubled prior to the outbreak.
Iconic British fashion company Burberry also said Friday that sales would be hurt by the coronavirus worries.
“The outbreak of the coronavirus in mainland China is having a material negative effect on luxury demand,” said Burberry CEO Marco Gobbetti in a statement. Burberry (BURBY) shares in London fell 1% on the report.
Burberry added that 24 of its 64 stores in mainland China are closed and its other stores are open with shorter hours. Fewer customers have been coming to its stores during the outbreak. The company also said that Chinese tourist spending at Burberry stores in Europe hasn’t slowed but “given widening travel restrictions, we anticipate these will worsen over the coming weeks.”
The coronavirus scares have caused many major retailers, airlines, tech, media and casino companies to warn of some impact to their operations in China, Hong Kong and Macau as they scale back operations, close retail and factory locations and have employees work from home.
Apple (AAPL), Disney (DIS), Starbucks (SBUX), McDonald’s (MCD), Delta (DAL), Las Vegas Sands (LVS), Nike (NKE), GM (GM) and Tesla (TSLA) are just a few of the numerous American companies that have reported about how coronavirus is hurting business.
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